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Incorporation

Setting up a company in Qatar

When setting up a company you may want to consider these factors:

  1. Business Factors

    Qatar is a relatively restrictive country in regards to foreign investments, in that shareholdings of incorporated entities must have at least 51% shareholdings by Qatari nationals. This is built upon the initiative of “Qatarization”, which intends to place priority of employment and power for Qatari individuals over foreign nationals. As such, it may be a complex and challenging environment to incorporate in Qatar. These factors must be considered, in addition to:

    • The industry and type of business that will be conducted
    • Nationality of the headquarters / individuals (s)
    • Presence of existing trade agreements or relationships
  2. Location

    Location will be another factor. Separate cities and regions may have different rules, costs and availability. Although Qatar is a geographically small country, it is always recommended to seek advice from relevant professionals, such as business or legal advisors, accountants and others depending on your needs.

  3. Language

    Qatar is a relatively multicultural region, with Arabic being the official language of Qatar and Qatari Arabic the local dialect. There is a prominent presence of English as the secondary language, particularly in commerce where there is a growing population of expatriates. Qatar also has a growing community of French-speaking individuals after Qatar had joined the French-speaking organization, La Francophonie in 2012.

Your Options

All foreign companies seeking to incorporate in Qatar must be established under the Foreign Investments Law No.13 of 2000, known as the Foreign Investment Law. Companies must also comply with the amendment of Law No.1 of 2010 stipulating that foreign investments may be made in most sectors in Qatar given their legal presence is registered in Qatar. There are two restrictions placed on foreign companies under the Foreign Investment Law:

  • Foreign ownership is restricted to a maximum of 49% of a company’s capital, where at least 51% must be owned by a Qatari partner. This restriction does not apply in certain sectors such as agriculture, industry, healthcare, education, tourism, energy or mining, and does not apply to projects that contribute to Qatar’s development plans.
  • Certain types of businesses are restricted, such as investments into banking and insurance which requires approval from the Council of Ministers for each individual case. Foreign investment in commercial agencies and real estate trading is not permitted.

There are several forms of legal entities which foreign companies may incorporate:

  • Limited Liability Company (LLC)
  • Partnership
  • Unincorporated joint venture
  • Branch/Representative Office

Branch/Representative Office

Both the branch and representative office are ideal methods for businesses seeking to establish a basic, limited presence in Qatar. A branch is relevant for foreign companies who intend to carry out business activities with a specific purpose or objective in Qatar. The representative office on the other hand is a restricted business presence which only allows marketing and administrative activities to be conducted. For both methods, ministerial approval from the Ministry of Economy and Commerce is required when applying for a branch contract or a representative office license.

Branch

A foreign company may open a branch in Qatar only if the company is awarded a contract by the Minister of Business and Trade for a project that contributes to public service or interest. Establishment of the branch office is governed by Article 3 of the Foreign Investment Law. The business must obtain a license to operate for the specific purpose and duration of completing the contract, and will expire once the terms of the contract have been fulfilled.

The projects that are approved for branch establishment must be approved by the Ministry of Business and Trade.  Business activities of the branch must adhere to the contract and in most cases are fully taxable. In addition, branches are considered the same entity as the foreign owner. Qatarization laws apply to branches, which give an advantage to Qatari businesses over foreign companies.

Representative Office

As of 2006, foreign entities may establish a Representative Trade Office (RTO) in Qatar with 100% foreign ownership. The representative office must not conduct financial transactions related to the company’s commercial activities in Qatar, and all functions are limited to marketing and administrative activities.

Some activities which a RTO may perform include:

  • Contacting clients to discuss service and product offerings of its foreign owner
  • Contact exporters and sellers of materials and removing barriers to transporting these materials
  • Administrative functions of handling product complaints and issues with distribution

A representative office is similar in nature to a branch, where a license application must be lodged to the Ministry of Business and Trade. Like a branch, the RTO is not considered as a separate legal entity may be fully owned by the foreign entity.

Processing Time: 4-8 weeks

Limited Liability Company

PLC

The Limited Liability Company (LLC) is one of the most popular methods of incorporation for foreign investors as it requires a relatively small amount of capital and can be established quickly. LLCs are appropriate for many types of foreign businesses in Qatar, although are restricted from engaging in banking, insurance or investment activities for third parties. A newly incorporated LLC is considered as a separate legal entity.

Liability

Limited Liability: Liability of each shareholder is only limited to the capital they have invested in.

Minimum Ownership

There is a maximum foreign ownership cap of 49% for most business entities in Qatar except for certain sectors. Protective provisions may be implemented to preserve the foreign owner’s power over the LLC at the discretion of the Ministry of Business and Trade, such as the right of more than 49% of the company’s profits.

Number of Founding Members

2 to 50

Minimum Capital Requirements

Traditionally QAR 200,000 and a sufficient amount to accomplish the company’s objectives. Under the current Commercial Companies Law, no minimum capital is specified.

The company may not raise additional capital via public subscription.

Procedure

The procedure of incorporating a company as a LLC is as follows:

1. Reserving a company name

The founding partners must submit an application for New Company Registration and an appropriate company name to the Commercial Registry and Trademark Department at the Ministry of Economy and Commerce. The company name availability check, reservation and payment can be completed online. Fees differ for Arabic and non-Arabic company names.

Time: 1 day

Cost:

Arabic name: QAR 1000

Non-Arabic name: QAR 1500

2. Opening bank account and minimum capital deposit

The founding members must open a bank account at a banking institution and the start-up capital must be deposited. A confirmation is then sent from the bank of the deposit, and this amount cannot be withdrawn until incorporation.

Time: 1 day

Cost: No charge. Minimum capital must be available.

3. Authenticate the articles of association

The articles of association for the company must be submitted in Arabic in the format of the Ministry of Justice. The official document must be stamped by the Commercial Companies Control Department so that the parties may sign it at the Authentication Department. This is a one-stop-shop authentication process where all relevant signatories must be present.

The articles of association include:

  • Company name, “with limited liability” appended
  • Company location
  • Objectives of the company
  • Fixed term of duration
  • Start-up capital
  • Restrictions on the transfer of shares
  • Names of all shareholders
  • Distribution of profits/losses between shareholders
  • Name of persons related to company management
  • Capital structure

Any shareholders who are business entities must provide these documents to the Ministry of Justice prior to signing the Articles of Association:

  • Legalized and authenticated Board/Shareholders Resolution approving incorporation of the company and appointment of representative to sign the Articles of Association
  • Legalized and authenticated Certificate of Incorporation
  • Legalized and authenticated Articles of Association of the entity
  • Passport copy of the authorized representative

4. Register with the Commercial Registry and the Chamber of Commerce and Industry

The founders must register with the Commercial Registry and the Chamber of Commerce and Industry via the one-stop-shop at the Ministry of Economy and Commerce. The following documents must be submitted:

  • Completed and signed application form by the managers and representatives
  • Chamber of Commerce authorized signatories form
  • Authenticated articles of association
  • Copies of authorized signatories’ ID cards

Time: 1 day

Cost:

Chamber of Commerce registry: QAR 2,200

Commercial Registration: QAR 500 – QAR 5000

5. Obtaining trade and signage licenses from the Municipality of Doha

A Trade License must be obtained through submitting the following documents:

  • Commercial Registration Certificate
  • Signed lease agreement translated to Arabic
  • Picture of the premise
  • Copy of the title deed

A Signage License must be obtained through submitting the following documents:

  • Sketch of the logo that will be placed on the office entrance, including size and name of company in Arabic and English
  • Picture of the premise’s exterior

The Municipality of Doha sends inspectors to the premises of the company before granting the Trade License.

Time: 1 day

Cost:

Trade License: QAR 10,020

Signage License: QAR 50 – 150 per square meter

6. Registry of taxes and obtaining a Tax Identification Number (TIN)

Registration of taxes is done through the Tax Department of the Ministry of Finance. The following documents must be submitted:

  • Articles of Association
  • Copies of the ID cards of the company founders and partners
  • The Commercial Registration of the company
  • Trade License
  • Certificate of the company premise’s registration
  • Certificate of appointment of the company auditors

Once the business obtains a trade license, the company may commence business operations, but the registration of taxes must be lodged at the Tax Department within one month of incorporation.

Time: 1 day

Cost: no charge

7. Company Seal

A company seal must be made for the use of stamping documents prior to submission to governmental agencies.

Time: 2 days

Cost: Average of QAR 150

Advantages

  • Shareholders’ losses are limited to their initial investment
  • Partners may divide profits disproportionately to their shareholdings
  • One of the cheaper and faster methods of incorporation

Partnership

A partnership may come in the form of a General Partnership or a Limited Share Partnership Company. The General Partnership is an arrangement where two or more founding members engage in commercial activity in Qatar. Both partners have unlimited liability and the trade name will reflect the names of the partners. In Limited Partnerships, there are one or more joint partners and at least four trustee shareholding partners. The limited partners have a limited liability to only what they have invested, while the joint partners have unlimited liability.

Liability

General Partnerships have joint and unlimited liability for any general partners.

Limited Partnerships have limited liability for the limited partners and joint and several liability for general partners.

Minimum Ownership

There is a maximum foreign ownership cap of 49% for most business entities in Qatar except for certain sectors. At least 51% of the partnership shareholdings must be by a foreign national.

Number of Founding Members

At least 2.

Minimum Capital Requirements

No requirements for minimum capital for General Partnerships.

Minimum share capital of QAR 1,000,000 for Limited Share Partnership Companies.

Procedure

The procedure of incorporating a partnership is as follows:

1. Reserving a partnership name

The founding partners must submit an application for New Company Registration and an appropriate partnership trade name reflecting the main partners to the Commercial Registry and Trademark Department at the Ministry of Economy and Commerce. The partnership name availability check, reservation and payment can be completed online. Fees differ for Arabic and non-Arabic company names.

Time: 1 day

Cost:

Arabic name: QAR 1000

Non-Arabic name: QAR 1500

2. Opening bank account

The founding partners must open a bank account at a banking institution. Minimum share capital is not required to be deposited for partnerships.

Time: 1 day

Cost: No charge

3. Authenticate the articles of association

The articles of association for the company must be submitted in Arabic in the format of the Ministry of Justice. The official document must be stamped by the Commercial Companies Control Department so that the partners may sign it at the Authentication Department. This is a one-stop-shop authentication process where all relevant signatories must be present.

The articles of association include:

  • Company name
  • Company location
  • Objectives of the company
  • Fixed term of duration
  • Start-up capital
  • Restrictions on the transfer of shares
  • Names of all shareholders
  • Distribution of profits/losses between shareholders
  • Name of persons related to company management
  • Capital structure

Any shareholders who are business entities must provide these documents to the Ministry of Justice prior to signing the Articles of Association:

  • Legalized and authenticated Board/Shareholders Resolution approving incorporation of the company and appointment of representative to sign the Articles of Association
  • Legalized and authenticated Certificate of Incorporation
  • Legalized and authenticated Articles of Association of the entity
  • Passport copy of the authorized representative

4. Register with the Commercial Registry and the Chamber of Commerce and Industry

The founders must register with the Commercial Registry and the Chamber of Commerce and Industry via the one-stop-shop at the Ministry of Economy and Commerce. The following documents must be submitted:

  • Completed and signed application form by the managers and representatives
  • Chamber of Commerce authorized signatories form
  • Authenticated articles of association
  • Copies of authorized signatories’ ID cards

Time: 1 day

Cost:

Chamber of Commerce registry: QAR 2,200

Commercial Registration: QAR 500 – QAR 5000

5. Obtaining trade and signage licenses from the Municipality of Doha

A Trade License must be obtained through submitting the following documents:

  • Commercial Registration Certificate
  • Signed lease agreement translated to Arabic
  • Picture of the premise
  • Copy of the title deed

A Signage License must be obtained through submitting the following documents:

  • Sketch of the logo that will be placed on the office entrance, including size and name of company in Arabic and English
  • Picture of the premise’s exterior

The Municipality of Doha sends inspectors to the premises of the company before granting the Trade License.

Time: 1 day

Cost:

Trade License: QAR 10,020

Signage License: QAR 50 – 150 per square meter

6. Registry of taxes and obtaining a Tax Identification Number (TIN)

Registration of taxes is done through the Tax Department of the Ministry of Finance. The following documents must be submitted:

  • Articles of Association
  • Copies of the ID cards of the company founders and partners
  • The Commercial Registration of the company
  • Trade License
  • Certificate of the company premise’s registration
  • Certificate of appointment of the company auditors

Once the business obtains a trade license, the company may commence business operations, but the registration of taxes must be lodged at the Tax Department within one month of incorporation.

Time: 1 day

Cost: no charge

7. Company Seal

A company seal for the partnership must be made for the use of stamping documents prior to submission to governmental agencies.

Time: 2 days

Cost: Average of QAR 150

Unincorporated Joint Venture

Unincorporated Joint Ventures (UJVs) involve several parties pooling resources together to jointly control and manage a project. Individual contractors and principals may engage together in a project in Qatar for several reasons:

  • The large size and capital requirements of projects in Qatar may be difficult for individual contractors to enter in. Pooling financial and managerial resources will allow these projects to be undertaken.
  • High risk projects may distribute the risk among more parties through a UJV.
  • A UJV can have a single management team which combines the expertise of members.

Liability

Limited Liability.

Minimum Ownership

A UJV does not incorporate a new, separate legal entity. The allocation of liability between the participating members must be indicated in the company Memorandum. Third parties may have a right of action against individual venturers, and not the joint venture itself.

Number of Founding Members

At least 2.

Minimum Capital Requirements

No minimum capital requirements for UJVs.

Although UJVs provide many benefits, the accounting, legal and tax consequences of forming an UJV is complicated. Careful planning must be done to successfully establish a UJV. The process of incorporating a UJV is much more complex than other standard incorporation methods. Professional advice is recommended.

Joint Stock Company

PLC

A joint stock company can be formed with a minimum of five members. Each member may contribute negotiable shares, and have a limited liability to the extent of their investments. Joint Stock Companies (JSCs) incorporated in Qatar must have all Qatari shareholders, while non-Qatari members may subscribe in capital, particularly those who have foreign capital or foreign expertise.

Liability

Limited Liability.

Minimum Ownership

JSCs must have 75% minimum ownership for Qatari nationals.

Number of Founding Members

At least 5.

Minimum Capital Requirements

Public JSC: QAR 10,000,000

Private JSC: QAR 2,000,000

Process

1. Drafting of a memorandum and articles of associations, submitted to the Minister of Economy and Commerce.

2. The documents must be signed by at least five founders.

3. The incorporation is subject to authorization by decree, published in the official gazette.

4. Founders must present a bank certificate proving the subscription of between 10 and 20% of subscribed capital to the Companies Control Department in the Ministry of Economy and Commerce prior to public subscription.

5. Documents must include the company’s trade name, head office, objects, details of members, amount of capital, number and classes of shares, duration and assessment of establishment expenses.

6. At least one auditor must be appointed.

7. The company’s management is determined by a board of directors of between 5 and 11 members.

Outsourcing Employment Through a GEO Employer of Record Service

Whether to incorporate in Qatar and what sort of entity to setup are just two of the many choices companies must make when expanding into a new market.

If the company intends to have staff in Qatar they must also decide whether they will administer that employment internally or use a Global Employment Organization to handle payroll and Employer of Record responsibilities.  A GEO Employer of Record solution is an attractive alternative where

  • the company is looking to setup an office quickly
  • the company wants to work within a defined budget
  • the company wants to limit its initial commitment in Qatar
  • the company needs help with tax, employment, immigration and payroll compliance in Qatar

The complexity of employment regulations in Qatar makes the use of a GEO advisable coupled with local legal counsel to ensure full compliance with employment laws, for example the drafting of local contracts for workers.

Shield GEO provides a comprehensive service in Qatar allowing companies to deploy their staff quickly with reasonable, clearly stated costs and timeframes. The company contracts directly with Shield to employ and payroll their staff on their behalf in Qatar.

Shield GEO then becomes the Employer of Record. Shield GEO assumes the legal responsibility for these employees, sponsoring them on work permits, complying with local employment law and running their monthly payroll. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Qatar. Read more about outsourced employment through Shield GEO.

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